The stock that has caused a FOMO wave among investors

If there's one stock that's creating FOMO for investors, it's Nvidia .

The AI (Artificial Intelligence) boom and a sudden surge in demand for its products and services, particularly its data centre business, has led to the California-based company's market capitalisation skyrocket from $360 billion to $2.1 trillion within just 15 months, as of March 8, 2024.

With this, Nvidia has joined the ranks of companies such as Microsoft , Apple and Aramco in the $2 trillion club and is now the third-largest company in the world in terms of market capitalisation.

But that's not all. Here are a few more reasons why investors cannot ignore Nvidia.

Scaling new heights

In 2024, Nvidia added close to $1 trillion in market capitalisation, i.e., greater than $20 billion every day. There are roughly 40 companies in India worth more than that.

To top that, the company grew by $277 billion on a single day (February 22, 2024) - higher than the market cap of Reliance Industries, the largest conglomerate in India, which stands at $240 billion.

That's not all. Even among US-listed equities, Nvidia stands amongst the titans. Only five other US companies - Microsoft, Apple, Amazon , Alphabet and Meta - are in the trillion-dollar market capitalisation club.

Moreover, in 2023, the 'Magnificent 7' carried the US markets of which, Nvidia did most of the heavy lifting. This rapid surge can be seen in the graph.

Is this growth sustainable?

As Nvidia continues to multiply investors' wealth by leaps and bounds, one question crops up: Do the company's financials justify its meteoric rise, or is this another bubble in the making?

To find out, we examined Nvidia's revenue growth, profit growth and net profit margin in 2023-24.

As the table shows, the company's financials performed impressively. What firms typically achieve in a year, Nvidia has been delivering on a quarterly basis.

In addition, the revenue in 2023 rose by 126 per cent from 2022, while net profits jumped by 581 per cent. Thus, net profit margins surged from 16 to 49 per cent during the same period.

While the numbers support the frenzy to some extent, only time will tell whether the company can sustain the ongoing AI boom.

Can Indian mutual fund investors invest in Nvidia?

Yes, they can. Here's a list of the mutual funds investing directly in Nvidia.

Further, several funds indirectly invest via foreign mutual funds or ETFs (exchange-traded funds) that have a stake in Nvidia.

Our take

While it may seem appealing to invest in the above funds, we suggest not blindly investing just for the sake of buying Nvidia's shares. Do your due diligence and assess your financial needs of requiring an international fund for geographical diversity before deciding to invest.

If you do, you can head over to Analyst's Choice , where we have provided our recommended list of international funds as they have exposure to Nvidia.

Also read: The fund that stirred a frenzy like no other in 1992